A day after US President Donald Trump claimed that India had agreed to significantly reduce tariffs on American products, government sources clarified on Saturday that trade negotiations between India and the United States have only just begun, making it premature to discuss specific tariff reductions.
According to officials, both nations have their own “interests and sensitivities,” which will be part of the discussions. Last month, Prime Minister Narendra Modi and President Trump agreed to initiate talks on a Bilateral Trade Agreement (BTA), with the first phase expected to be finalised by fall 2025.
India’s response to Trump’s tariff claims
Trump’s remarks on India’s tariff cuts were seen in New Delhi as premature. “India charges us massive tariffs… but they have now agreed to cut them way down,” Trump stated at the White House. However, Indian Foreign Secretary Vikram Misri refrained from commenting on the specifics of the discussions, emphasising that tariff liberalisation has been a component of India’s trade agreements with other partners.
Tariff liberalisation and reciprocal measures
In line with his “America First” policy, Trump recently announced reciprocal tariffs on countries imposing high duties on US imports. This has raised concerns about a global trade war. India has reduced tariffs for key trading partners like Australia, the UAE, Switzerland, and Norway under bilateral agreements and is currently negotiating with the EU and the UK. The sources also pointed out how discussions had taken place between India and the US for a limited trade deal during the first Trump administration. For various reasons, it did not produce an outcome, they said.
Bilateral trade relations
The Indian government reiterated that discussions on tariffs and market access are part of an ongoing process. “Since negotiations have just begun, it is premature to discuss details. Each aspect must reflect mutual interests,” sources said.
External Affairs Ministry spokesperson Randhir Jaiswal stated that the BTA aims to enhance India-US trade, increase market access, reduce barriers, and integrate supply chains.
India’s Union Budget for 2025-26 announced tariff reductions on Bourbon whiskey, wines, and electric vehicles, signalling openness to lowering duties in key sectors. Washington has also urged India to buy more US oil, gas, and military equipment to reduce the trade deficit, which currently stands at approximately $45 billion in India’s favour.
India-US trade
The US remains India’s largest trading partner, with bilateral trade reaching $190 billion in 2023. Additionally, the US was the third-largest foreign direct investment (FDI) source for India in 2023-24, with investments amounting to $4.99 billion.
(With PTI inputs)